Lawsuit for Negligent Construction After Transfer of the Property
In Vaughn v. Dame Construction Co. (1990) a construction company defendant was contending that the plaintiff, a former owner of real property, could not prosecute an action for negligent construction because of her transfer of the property.
The Court of Appeal was not buying that contention:
"No one other than plaintiff can recover for the damages she sustained as owner of the property at the time the injury occurred.
The fact that the property was sold after the damage occurred does not mean the new owners are now the parties entitled to recover for the damage suffered by plaintiff while she was the owner.
In order for the new owners to maintain an action, they would first have to establish damage to their interests in the property.
If, as plaintiff's counsel represents, the new owners bought the property with full knowledge of the defective construction and presumably paid no more than the fair market value of the property in its defective condition, there is little likelihood that the new owners would or could assert the same claim as plaintiff.
As the person who sustained the damage, the cause of action was vested in plaintiff and she is therefore the real party in interest entitled to maintain the present action.
The subsequent sale of the real property did not automatically assign or transfer her cause of action." (Id. at p. 149, fn. omitted.)
Compare also CAMSI IV v. Hunter Technology Corp. (1991) 230 Cal. App. 3d 1525, 1535 [282 Cal. Rptr. 80] (approaching the matter as an issue of the running of the statute of limitations, and holding that once the harm to the property is done "no case has held that each new owner . . . becomes entitled to a new statute of limitations against the tortfeasor").